The following steps will help in resolving this issue:
1) Open the AVD manager (Using eclipse: Window -> Android SDK and AVD manager or
2) The below AVD manager window will open:
3) Select the virtual device which you want
4) Click Start, a small pop up with Launch Option will open
5) Uncheck the "Launch from snapshot" option.
By default, the android emulator will have the "Snapshot" option enabled during AVD creation.
Note: The current removal of "open from snapshot" option will not change the existing setup in the AVD. It is only for the current run.
Share your thoughts (email / comments) on the other ways to overcome this android emulator problem...